For many people, estate and long-term care planning is a daunting task. It forces us to confront head-on the unpleasant possibility of disability and the absolute certainty of death.
Many people delay planning until a loved one’s death or until the family’s life savings are threatened because of long-term health care expenses. Others ignore the planning process altogether, leaving everything to chance. While this “un-plan” can work out, more often than not, it doesn’t, leaving behind unintended, expensive, and sometimes family-dividing consequences.
Careful, well thought out estate and disability planning can be a significant gift to your loved ones through the preservation of family wealth and unity. It can also ensure that you are well protected in the event of disability and that your plans for the distribution of your accumulated wealth are honored at your death.
The definition of estate and disability planning that best describes the process is “the establishment of a plan to:
- Control and protect my property while I’m alive,
- Take care of me and my loved ones if I become disabled,
- When I die, give what I have, to whom I want, when and how I want.
- Save as much in taxes, professional fees, and court costs as is legally possible.
There is so much that can be achieved in a properly crafted plan. You can appoint the most responsible and caring people to handle your business and health care affairs if you become disabled, through the use of “power of attorney” and “health care proxy.” A “living will” can ensure that your end-of-life wishes regarding life-support are honored.
You can avoid the expensive and time-consuming probate process through restructuring your assets or placing them into a trust. You can eliminate or minimize gift, estate, and income taxes through use of gifting involving direct gifts, trusts, and other entities. You can ensure that your assets are protected from the ravaging costs of long-term care by exploring the options of self-insuring, long-term care insurance, and other asset protection planning.
Planning also enables you to create creditor and divorce protection for your children, create a time schedule for the payment of an inheritance, ensure that disabled beneficiaries receive their inheritance without interruption of public benefits, balance the needs of the second spouse and the children from the first marriage, and ensure that the non-favored “in-law” never receives a penny, to name a few.
It bears repeating: A well crafted and considered estate and disability plan can ensure your protection in the event of disability, maximize family wealth, and minimize family conflict. It can give you peace of mind knowing that your plans will be honored.
Meg Rudansky is a Sag Harbor-based attorney who specializes in the areas of Elder Law, Estate Planning, and Probate. She can be reached at 725-4778.